Passage of GST Bill is history in the making, says 'optimistic' Jaitley
- Author: Arturo Norris Mar 31, 2017,
Mar 31, 2017, 17:26
The states will wait and see the tax buoyancy, and decide accordingly after the first year of GST implementation.
GST Council will consult with state governments and Centre together. Banerjee said it was West Bengal which always fought for cooperative federalism and fiscal autonomy and the rights of common people and small traders.
But the main opposition Congress Party leaders challenged the government on the radical tax reform calling it "only a baby step".
The Central GST deals with taxation related to Centre, integrated GST deals in taxation of inter-state movement of goods and services while the Union Territory GST Bill covers taxation in Union Territories.
The GST regime will subsume various indirect levies of the central government and states like service tax, excise duty, octroi and value added tax (VAT), and create an input tax credit chain for refunds.
The Central GST (CGST) bill - one of the four legislations introduced, states that any lease, tenancy, easement, licence to occupy land will be considered as supply of service.
Even as the Parliament discussed the Goods and Services Tax (GST) bill on March 29, Congress leader Veerappa Moily expressed his concern over the categorization of goods and said it is yet to be done.
Proposed tax rates range from 5 to 28 percent, with 12 percent and 18 percent being the standard rates.
Tax experts said that now service tax is levied on rents paid for commercial and industrial units, although it is exempt for residential units.
Jaitley said the cess would be transient for a period of five years so that the proceeds can be utilised to compensate the states. Besides, these items are also likely to attract a cess of up to 15 percent, taking the effective rate to as high as 43 percent.
Jaitley said as keeping it as tax would have resulted some portion of the money going to devolution. Some sections of industry have suggested that GST should instead be rolled out from September 1 to ensure that there is adequate preparation and awareness about the levy.
"Besides that the process to classify which commodities will fall in which category will start next month".
On the powers of CAG to audit GST, the Minister said that the official auditor draws its power from the Constitution and the CAG Act and there was no need to mention it separately in the legislations. Once these Bills are cleared by Parliament, the states will then take the state GST Bill to their respective assemblies.